# The Electricity Capacity Regulations 2014, Regulation 59: Requirement to provide applicant credit cover


(1) Subject to paragraph (1B), an applicant to prequalify for a capacity auction in respect of a CMU (“CMU i”) must, if the applicant receives from the Delivery Body a conditional prequalification notice under capacity market rules, provide applicant credit cover in the amount determined in accordance with paragraph (2).
(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1B) Where an applicant provides applicant credit cover for a capacity auction in respect of an unproven demand side response CMU or an interconnector CMU, the applicant is not required to provide further applicant credit cover for any subsequent capacity auction in respect of that CMU except in circumstances specified in capacity market rules.
(2) Subject to paragraph (2C), the amount of applicant credit cover to be provided is—
(a) in the case of an application to prequalify for a T-4 auction or a T-1 auction—
(i) subject to paragraph (ia), if CMU i is an unproven demand side response CMU, an amount equal to £6,500 per MW of the de-rated capacity of CMU i; ...
(ia) if CMU i is an unproven demand side response CMU, in respect of which the applicant has applied to prequalify to bid for a multi-year capacity obligation and has not yet met the requirements for DSR partial credit cover release in accordance with the Rules, an amount equal to £13,000 per MW of the de-rated capacity of CMU i; and
(ii) if CMU i is not an unproven demand side response CMU, an amount equal to £13,000 per MW of the de-rated capacity of CMU i;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2C) The applicant credit cover provided under paragraph (1) must, where an applicant which applied to prequalify to bid for a multi-year capacity obligation in respect of an unproven demand side response CMU has met the requirements for DSR partial credit cover release in accordance with the Rules, be reduced to an amount equal to £6,500 per MW of the de-rated capacity of the CMU.
(3) If A is required to provide credit cover under paragraph (1), A must do so within 15 working days after receiving the conditional prequalification notice.
(4) The applicant credit cover provided under paragraph (1) in respect of a new build CMU must—
(a) where 12 months have elapsed after auction results day and where an applicant has not met the financial commitment milestone in accordance with the Rules, be increased by the capacity provider to an amount equal to £19,500 per MW of de-rated capacity; and
(b) where subsequently the applicant meets the financial commitment milestone in accordance with the Rules, be reduced to an amount equal to £13,000 per MW of de-rated capacity.
(5) The increased credit cover required to be provided under paragraph (4) must be provided within 15 working days after the end of that twelve-month period.
(5A) Where CMU i is not an unproven demand side response CMU, the applicant credit cover provided under paragraph (1) in respect of CMU i must, where notice requiring an increase in applicant credit cover is given to a capacity provider by the Delivery Body under the Rules, be increased by the capacity provider to an amount equal to £45,500 per MW of de-rated capacity.
(5B) The increased credit cover required to be provided under paragraph (5A) must be provided within 15 working days of notice being given by the Delivery Body.
(6) For the purposes of paragraph (4)—
(a) “new build CMU” has the meaning given in the Rules; and
(b) “auction results day” means the date on which the auction results are published under regulation 25(1)(c).
(7) In this regulation, “DSR partial credit cover release” has the meaning given in the Rules.

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Source: https://www.legislation.gov.uk/uksi/2014/2043/regulation/59 (the official version)
Page: https://openlegislation.uk/electricity-capacity-regulations-2014/regulation-59
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.